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Advantages of Market Segmentation
Why Segment Your Market?
Companies must work harder to ensure that their marketing has the greatest impact possible.
Increasing competition makes it difficult for a mass marketing strategy to succeed. Customers are becoming more diversified and firms are constantly differentiating their products relative to competitors.
When the focus is on segmented markets, the company's marketing can better match the needs of that group. Market segmentation allows firms to focus their resources more effectively, and with a greater chance of success. Marketing, product and brand managers are continuously being asked to increase their return on investment. They're constantly searching for new information about their markets, and new ways to approach them.
This is where market segmentation comes in.
Divide and Conquer
Market segmentation focuses on that subset of prospects that have the greatest potential of becoming customers and generating revenue.
Companies who segment their markets match their strengths and offerings to the groups of customers most likely to respond to them.
Differentiate your products and services to meet your customer needs and desires.
Design or redesign new products and services to meet your market needs.
Find hidden needs and make improvements to your existing products.
By selecting and focusing on the most responsive segments to the exclusion of others, marketing can be created to more effectively fit your consumers.
Finding, understanding and focusing on the needs of your best customers can make you a market leader.
Target your marketing mix to the customers most likely to want your products or services
Identify behaviors and buying motives for your products.
Identify your most and least profitable customers.
Help you avoid unprofitable markets.
Increase brand loyalty and decrease brand switching.
Learning more about your competitors makes you more effective
Improve your competitive positioning to be more accurate and better differentiate you from the competition.
Reduce competition by competing in a more narrowly defined market and establishing a niche.
Market segmentation is a proven way of improving profitability. By focusing on individualized sub groups, you're better able to meet their needs and gain higher market share and profits.
Refine your pricing to maximize revenue.
Find markets where you can increase your price.
Optimize your marketing resources and get the most impact for your investment
Focus and match your activities to things you can do effectively and profitably
When segmentation is done right, you get the highest return for your marketing expenditure.
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